What do the plans to write off debts to war veterans in russia mean
The russian government is planning to grant war participants the opportunity to use the out-of-court bankruptcy procedure. This simplified debt relief mechanism was introduced in September 2020 for socially vulnerable groups amid the COVID-19 economic crisis. However, it has gained the most demand during the war.
Debts of up to 1 million roubles (approximately 11,000 USD) can be written off, but not earlier than one year after receiving a certificate of participation in the war. This initiative may indicate a growing issue, where people returning from the war find themselves in extreme social hardship. The promise of debt cancellation may also be used as a recruitment tool for the aggressor state’s army, serving as an additional incentive to go to war.
A key aspect of this mechanism is that the state simply “forgives” debts without providing any compensation to financial institutions, ultimately leading to multi-billion losses for them. Thus, the russian authorities have once again found a way to “take care of war participants” at someone else’s expense.
